As You Were, Corporate Criminals. The Government is Still Ignoring You.

It looks like corporate criminals will have nothing to worry about during the second Obama administration. Although Sen. Elizabeth Warren is hammering bank and government officials about corporate malfeasance and barely nominal oversight, we have heard from Attorney General Holder that economic considerations outweigh legal concerns when determining whether banks are “too big” to prosecute. And although the chronically naïve believe that Mary Jo White, as new chairman of the Securities and Exchange Commission (SEC) will be a “new sheriff” policing Wall Street, her career is one of shuttling between jobs in government (a former US attorney) and high powered law firms representing Wall Street interests. Ms White, in her confirmation hearing, conceded that her past prosecution decisions depended on the impact of a prosecution on the target corporation’s stockholders.

Of course, corporations are often targets of civil actions by the government. And without consideration of the big picture, it is easy to be impressed by the multimillion dollar fines levied against corporate breaches of the law. But the fines paid by giant corporations amount to a small percentage of their profits. These payments to the government are essentially a tax, at a very low rate, paid for the privilege of treating federal regulations like a nuisance to be tolerated but not taken seriously. Therefore, although “corporations are people (my friend),” they are largely immune from criminal prosecution. Corporate “persons” are fined. The criminal persons who make the corporate decisions are spared indictment, prosecution, trial, conviction, and prison. No doubt, major players in organized crime would love to pay small fines instead of facing RICO charges.

The long arm of impunity reaches into Chicago as well. The candidates to replace Patrick Fitzgerald as US Attorney have all rotated through the revolving door of government-to-corporate-to-government employment, obtaining in-depth knowledge of the workings of both systems, especially the strengths of corporations and the weaknesses of government. We can assume that the next US Attorney for the Northern District of Illinois will go after the low-hanging fruit of corrupt politicians with enthusiasm characteristic of his or her predecessors. Of course, a paper airplane launched into any random meeting of Chicago area politicians is likely to land on an indictable official. On the other hand, corporate criminals can breathe easy. Political prosecutions are what our US Attorneys do; “white collar” crimes are rare, and corporate crime is next to nonexistent.


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